County council ‘saddled’ with £700m PFI debts

PRIVATE Finance Initiative (PFI) debts at West Sussex County Council totalled more than £700million earlier this year.

The majority of councillors voted to approve a five-year £676million capital programme on Friday, but many expressed concerns over provisions for up to £75m extra borrowing. Leader Louise Goldsmith (Con, Chichester West) said this was an envelope to work with and not a target. But James Walsh (LDem, Littlehampton East), leader of the county council’s Lib Dem group, said that borrowing figures did not include the ‘eye watering’ £707million PFI debt that they were ‘saddled’ with as of March this year.

County councillor James Walsh

He felt that cabinet member for finance Michael Brown was adept at confusing councillors with ‘smoke and mirrors’. Dr Walsh said: “In the shadows is a much, much bigger debt burden hanging around our necks for the next 20 years because of our PFI programme, because effectively 100 years of Conservative under-investment in infrastructure in West Sussex.” But Mr Brown (Con, Fernhurst) explained they were given some support to repay the PFI debts to the tune of almost £13million a year.

In his opening speech he explained that they were aiming to avoid their ‘gearing ratio’ exceeding 1:1, where total debt would be more than annual revenue spending.

Current projections have WSCC’s borrowing at £503million in 2021 compared to a revenue budget of £483m,illion which would see the ratio at around 1.04:1.

Mr Brown added: “Caution and moderation remain our watchwords.” But Peter Lamb (Lab, Northgate and Three Bridges), echoed Dr Walsh’s points, and said: “Let’s be quite clear the gearing is well over the value we are told is disastrous.”

He explained how local debt counts towards the national debt, and felt they were being asked to sign off projects without enough information or individual business cases.

Several Conservatives including Steve Waight (Con, Goring) and Deborah Urquhart (Con, Angmering and Findon) raised concerns about the £75million figure, but welcomed assurances that extra income would be used to reduce borrowing and robust governance arrangements.

Two amendments to the recommendations were both defeated. The first involved a bid for a new fire station for Crawley. Michael Jones (Lab, Southgate and Crawley Central) argued a new station had been promised by WSCC, and Crawley Borough Council was willing to give up a parcel of land to the county council.

But this was defeated by 49 votes to six, with nine abstentions, despite an allegorical fairy tale by Sue Mullins, where she attempted to explain how Crawley often missed out on funding through a tale about a magical kingdom, wizards, and treasure. She said that WSCC was ‘crossing its fingers hoping for a miracle, passing the debt on to future members’. But Peter Griffiths (Con, Hurstpierpoint and Bolney) said his ‘will to live is evaporating very rapidly’ after Mrs Mullins’ story, while Mr Brown described it as one of the ‘most silly and stupid’ contributions he had ever heard.

David Barling (Con, Bramber Castle), cabinet member for residents’ services, argued the motion breached a most important principle, prioritising a scheme in one part of the county to the detriment of every other division.

A second UKIP amendment dealing with governance arrangements was also defeated as members argued it had been superseded by alterations to the original recommendations.